The first alleges that on November 21, 2010 he failed to disclose to Mid Devon District Council that he had a private Scottish Life pension from which he was receiving payments of £1,943 a year.

The second alleges a similar charge on March 9 this year in which he failed to disclose the pension and income from the Mid Devon Liberal Democrat Party.

Mr Martin Meeke, QC, said Wilson had a specialist knowledge of the system and must have known what he was doing was wrong.

He said:”The total amount involved in this case is about £4,000 but what makes this case perhaps more serious is that the defendant is a Mid Devon councillor.

“He knows the rules and deliberately broke them and when interviewed by investigators he lied to them. He persists in denying his dishonesty.

“The total amount he was overpaid has been calculated as £3,866.81 but this case is not about the pennies. It is about his dishonesty.”

Mr Meeke said Wilson had three private pensions which he combined into a single policy with Scottish Life which he started receiving when he turned 50, taking a lump sum of £9,000 and annual payments of £1,943.48.

He took some of his claims forms into Phoenix House in person while working as a councillor and explained the pension money as being from selling a car. The next year he set up a new bank account and did not declare the money at all.

He said Wilson also received £114.08 for writing work for the Liberal Democrats which he failed to declare, saying it was legitimate expenses.

Mr Meeke said when interviewed Wilson claimed the pension money was not his and was put aside for his daughter’s education.

He said he got mixed up when he told officials the first payment of £1,943 was from the sale of a Mercedes on eBay.

He said he was £30,000 to £40,000 in debt and had opened the new account to prevent the pension money being swallowed up by his existing overdraft.